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SBA 7(a) lending continued to gain momentum in the second quarter of FY2025, reinforcing what many lenders are already seeing firsthand: borrower demand is strong, and funding levels are rising fast. Following a solid Q1, the latest numbers show steady growth in loan volume, total dollars approved, and jobs supported. By tapping into data from LenderAI Insights and the SBA, we’re taking a closer look at the lending activity driving this momentum and what it could mean for the months ahead.
In Q2 FY2025, 22,764 SBA (7)a loans were approved, totalingver $10 billion in gross funding. Thats a 35% increase in loan count and a 45% jump in dollars approved compared to Q2 FY2024, which saw 16,784 loans totaling $6.92 billion.
These numbers reflect a continued upward trend from Q1, signaling a healthy appetite for SBA-backed financing. For lenders, it’s a strong indicator that the market is not only active but expanding as businesses aren’t just borrowing more, but for larger amounts.
Businesses listed as corporations remain the primary borrowers, accounting for nearly 95% of all loan dollars this quarter. However, all business structures saw growth, particularly among partnerships, which were up nearly 86% year-over-year in total dollars approved.
Loan sizes are trending upwards across the board. Compared to Q2 FY2024, each loan size tier that we analyzed saw growth in both volume and total dollars approved.
Larger loans saw significant growth, with loans over $500K increasing by 49% in volume and 45% in total funding. Similarly, smaller loan tiers saw meaningful increases:
Notably, the number of loans up to $500K increased by 35%, jumping from 13,656 in Q2 FY2024 to 18,496 in Q2 FY2025. This shift represents thousands more small businesses accessing meaningful capital to hire, invest and grow.
These trends point to a healthy mix of borrowers tapping into SBA 7(a) funding. From helping startups get off the ground to empowering more seasoned businesses take their next big step, it's clear that SBA lending in Q2 FY2025 is supporting both ends of the small business spectrum.
Even as loan sizes trend upward, the core of SBA 7(a) lending remains the smallest businesses. In Q2 FY2025:
That’s over 75% of loan volume supporting truly small businesses, demonstrating that the program remains a critical funding source for entrepreneurs and early-stage ventures.
The same top three industries from last year continue to lead the way in SBA 7(a) lending: Full-Service Restaurants, Limited-Service Restaurants, and Residential Remodelers. Each has seen solid growth in both loan count and total funding compared to Q2 FY2024.
Together, these three industries accounted for a significant share of SBA 7(a) activity in Q2, underscoring their importance in the small business economy.
SBA 7(a) loans continue to deliver real economic value. Loans approved in Q2 FY2025 supported 220,494 jobs, up from 162,082 in Q2 FY2024. That’s a 36% increase in jobs supported in just one year, reinforcing the SBA program’s role in labor market growth.
The latest Q2 data reinforces the steady momentum for SBA 7(a) lending in FY2025. Growth in both loan volume and total funding suggests that more businesses are turning to SBA-backed financing to not only get started but also scale operations and invest in long-term growth. Businesses structured as corporations continue to lead in borrowing activity, but growth among partnerships and individuals points to broader participation across business types.
Even with a noticeable rise in higher-value loans, the program remains firmly rooted in supporting microbusinesses. More than 75% of loans went to businesses with 10 or fewer employees, underscoring that the SBA 7(a) program continues to serve its intended mission of empowering truly small enterprises.
Meanwhile, job creation figures show that these loans are directly translating into economic output. The 36% year-over-year increase in jobs supported points to the tangible impact SBA financing is having on small business growth and hiring activity.
The Q2 data reinforces the momentum we saw at the start of FY2025—and if this pace continues, we could be on track for one of the strongest SBA 7(a) lending years yet. With demand rising, funding volumes climbing, and more small businesses securing the capital they need to grow, the lending landscape is both active and accelerating.
Want to stay ahead of these trends? Create or login to your free LenderAI Insights account today and gain instant access to SBA lending data, borrower behavior, and industry benchmarks. Whether you're looking to grow your SBA portfolio or fine-tune your lending strategy, LenderAI Insights makes it easier to act on what the market is telling you.
*SBA Data as of 5/12/25
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